ONGC shares tumble by nearly 3% post weak Q4 results

The shares of state owned ONGC was down by nearly 3 per cent on Monday in intraday trade on BSE after the firm's consolidated net profit declined 53 per cent to ₹5,701 crore for the quarter ended March. The profit stood at ₹12,061 crore in the March quarter of last year.

The company's share declined 2.54 per cent to ₹159.45 on BSE. On a year-to-date basis, ONGC's share rose by 6.02 per cent.

Its revenue from operations during the reporting quarter rose 5 per cent to ₹1.64 lakh crore. It was ₹1.55 lakh crore in the corresponding quarter of last year.

ONGC's consolidated turnover stood at Rs.6,84,829 crore in FY23, compared to ₹5,31,793 crore in FY22. On a standalone basis, the oil and gas explorer reported a net loss of ₹247 crore in the fourth quarter, compared to a net profit of ₹8,859.5 crore in the same period last year.

On the operating front, the company's earnings before interest, taxes, depreciation, and amortization (EBITDA) during Q4FY23 came in at ₹20,996.73 crore, down 14.57 per cent year-on-year, over higher cost of material consumed.

The company's board declared a final dividend of ₹0.5 per equity share of the face value of ₹5 each (10 per cent) for the financial year 2022-23, upon the approval of shareholders.

Here's what brokerages say:

Motilal Oswal has also given a buy rating with a target price of ₹165.

ICICI Securities maintained its buy rating on ONGC with a target price of ₹164.

"Despite the miss in Q4FY23, full-year FY23 earnings were strong with standalone EBITDA / PAT up 44% / 19% YoY. Additionally, we note that, even at a realisation of US$75/bbl for oil and ₹20-21/scm for gas, standalone and consolidated EPS for FY24E of ₹40.5/sh and ₹41.4/sh, respectively, are well above the average EPS for FY22/FY23," it said.

"With full production from KG field to be available by FY25E, our FY25E EPS estimate of ₹46.4 signifies stronger earnings prospects, even with capped realisations on oil and gas. We believe valuations at 3.5x FY24E consolidated EPS and 2.2x EV/EBITDA remain attractive," it added.